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First Move with Julia Chatterley
Elon Musk Says Supply Chain Issues are Forcing Up Prices; OPEC Plus Talks Supply as Oil Hits Three-Year Highs; Australia's Softball Team Arrives Fully Vaccinated in Tokyo. Aired 9-10a ET
Aired June 01, 2021 - 09:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
[09:00:17]
JULIA CHATTERLEY, CNN BUSINESS ANCHOR, FIRST MOVE: Live from New York, I'm Julia Chatterley. This is FIRST MOVE and here is your need to know.
Tesla tweaking. Elon Musk says supply chain issues are forcing up prices.
Energy expectations. OPEC Plus talks supply as oil hits three-year highs.
And Olympian on boarding. Australia's softball team arrives fully vaccinated in Tokyo.
It's Tuesday, let's make a move.
A warm welcome to all our First Movers from around the world. Fantastic to be with you as always, as we begin a new month together, and as always, we
have got a great lineup of guests for you today.
We've got -- I'll talk to Julie Gerberding. She is former U.S. C.D.C. Director, and the current Chief Patent Officer at drug maker Merck on the
urgent need to rush COVID vaccines and therapeutics to all corners of the globe as we fight to outrun virus variants.
Plus, entrepreneur and tech investor Gary Vaynerchuk and famed crypto bull, Mike Novogratz of Galaxy Digital, we will be talking crypto, NFTs and a new
digital collectible partnership with Major League Baseball.
Looking ready to score some runs, the U.S. majors -- looking out my baseball terminology ahead of that interview.
Europe also rising to fresh all-time highs and Asia making gains across the board, too. The big economic story today, more evidence of soaring demand
for goods, squeezed supplies and rising prices.
Firstly to the oil market. Brent and U.S. crude at multi-year highs fueled by rising demands as economies recover, but also perhaps that OPEC won't
react fast enough to raise supplies in order to meet it. OPEC Plus meets today, so we will be discussing that later on in the show.
Elsewhere, South Korea reporting its best export numbers in 30 years, and in the Eurozone, factory growth hitting all-time highs last month, but
inflation at more than two-year highs. Certainly above the European Central Bank's targets.
Factory managers there are warning that there is no end in sight, too, for product shortages and supply pressures. Something, as I mentioned briefly
at the top of the show, car maker, Tesla is juggling with, and that is where we begin the drivers.
Elon Musk saying the price of Tesla vehicles is rising because of the supply chain pressures. Clare Sebastian joins me now.
It's one of a number of price increases, let's be clear, over the past couple of months. What's always interesting with this one though is that it
was announced on Twitter in response to a tweet complaining about those price rises.
CLARE SEBASTIAN, CNN BUSINESS CORRESPONDENT: Yes, Julia, always look for news in Elon Musk's reprise to tweets, not just his own tweets.
This according to Dan Ives at Wedbush is the seventh incremental increase in the price of the Model 3 and why over the past few months, so
significant, and Tesla, as we know, not immune to the supply issues that we have seen affecting all car makers.
This is what Elon Musk said in this tweet. He said, "Prices increasing due to major supply chain price pressure industry-wide. Raw materials
especially." We know things like copper, steel, aluminum, all of those that are essential for car making, those have gone up shockingly in price
according to businesses I have been speaking to, and at the same time, we're seeing a shortage of microchips also due to supply chain issues.
That has led to interruptions in production, port capacity issues have led to higher expedite cost. We learned all of this on Tesla's most recent
earnings call, and the price increases have been fairly significant. You know, I look back at the internet archive, in February the Model 3 standard
range was $29,000.00. Now it's $33,500.00, so that's really around a 15 percent price increase on that.
So fairly significant, and again, Tesla blaming raw materials. They did though say in that recent earnings call that the situation does look like
it is improving.
CHATTERLEY: Yes, and you've had a shocker as well if you had paid in Bitcoin and then had a refund in the interim as well, but that's a
completely separate point.
Clare, it always makes me laugh when we talk about Tesla, whatever the story is, because of course they don't pay any advertising or marketing
expenditure because we end up doing it for them and obviously, Elon Musk does it himself. But it does draw attention to issues like this that
perhaps other car makers might be doing stealthily behind the scenes, too.
What are we hearing from other car makers perhaps about rising prices, too?
SEBASTIAN: Well, we know prices are going up, Julia. And again, this is what we're talking about when we talk about inflation, the intersection of
supply chain disruption called an unsurging demand. We know that demand for new cars has gone up dramatically. People are going back to work, they need
them for commuting. People still get wary of public transport Things like that.
So J.D. Power says in the first quarter, the new car prices in the U.S. were up eight percent to $37,200.00.
[09:05:10]
SEBASTIAN: It's also affecting used cars dramatically. Those prices have been up at auction 26 percent since the start of the year. Retail
apparently up seven percent, but I know from speaking to used car dealers that they are also raising prices they say by about 20 percent, so it's a
huge crunch in that industry at the moment.
Worth noting though, when comparing with Tesla that buying a Tesla is a bit different than buying another type of car. Often with other types of cars,
you can haggle; Tesla tends to not allow that. You pay the sticker price, so that's why those price increases are significant there.
CHATTERLEY: Yes, Clare Sebastian, thank you so much for that.
All right, tied to this story, oil at two-year highs going into an OPEC Plus meeting. Right now, the cartel is discussing with allies how much oil
to supply in the summer, Brent and WTI are trading around $70.00 a barrel. Anna Stewart joins us now.
We're clearly seeing oil demand bouncing back even with some of the mobility restrictions that we still have in place around the world. Anna,
what can we expect from this meeting?
ANNA STEWART, CNN REPORTER: Well, the next big decision really for OPEC Plus is what are they going to do beyond July? Because they already
returned some oil to the market after huge cuts last year in April that goes to the period through July. But as you said, this demand recovery is
really taking off particularly led by the U.S. and Europe.
Just yesterday, the technical committee for OPEC, the JTC confirmed that they're expecting a jump in oil demand around the world by six million
barrels a day. So the big question is, they are going to have to turn those taps on, but just how fast do they do that? And we're actually not
necessarily going to get any big decision today, they may wait to the end of June.
There are a few complications to this picture. One, the fact that while this recovery demand in the West is pretty strong, it is actually for once
not really being matched in Asia, particularly India, of course, a huge consumer of oil facing such a bad case of COVID, and so that could impact
this picture.
Also Iran, Julia. U.S.-Iran nuclear talks well underway, lots of optimism there for that. And what would that mean? That could mean sanctions are
lifted. Iran could bring millions of barrels a day back onto the market.
CHATTERLEY: Anna, where are you, by the way? I know this is a virtual meeting, but I can't take my eyes off the backdrop and how sunny and happy
it looks there.
STEWART: It is very sunny and happy here, Julia. I say the only real link for oil would be the tanning oil that Londoners will be putting on today as
they burn to a crisp on the first day of sunshine. But this is very near my home. This is my makeshift studio until the big return hopefully not too
long -- Julia.
CHATTERLEY: Yes, I was about to say, it beats going to the OPEC meeting. Anna, great to have you with us. Thank you so much for that.
Okay, to Japan now where Olympic athletes are starting to get vaccinated ahead of the Summer Games next month. Australia's softball team arrived on
Tuesday. They are among the first overseas competitors to travel to Japan for the Olympics. Selina Wang is live in Tokyo for more.
Selina, the first team from Australia arriving fully vaccinated, I believe, but for others, they can get vaccinated on arrival.
SELINA WANG, CNN CORRESPONDENT: Well, Julia, vaccinations have actually just started today on Tuesday in Japan for these Olympic athletes starting
with 200 inoculations of these athletes today.
Now, the fact that these athletes can jump the line here in Japan for the vaccines has drawn much public scrutiny given as we've discussed, less than
three percent of the Japanese population has been fully vaccinated with only medical workers and those 65 and older currently eligible.
Now the government is trying to speed up that pace. They've been opening these mass vaccination sites here in Tokyo, as well in Osaka. The
government has also announced that they're also going to start making vaccines available at universities and at workplaces.
Now, officials have said that they expect more than 80 percent of the Olympic Village to be vaccinated. This does not include the tens of
thousands of officials and volunteers that will be coming into contact with that bubble. However, you also have Pfizer and BioNTech saying they're
offering to donate these vaccines to the Olympic athletes.
But Julia, that does not ensure that all of these athletes are going to be vaccinated in time considering that you have more than a hundred countries
that are struggling with vaccine authorization and availability.
Right now as well, another issue we're watching closely is the fact that local spectators we don't know if any, or how many can be allowed in the
stands. We know that foreign spectators are already banned. But you have local media now reporting that they may require a negative PCR test or a
vaccine certificate in order for these domestic spectators to get into the stands.
But Julia, unclear how many of those people there will be with that vaccine certificate considering we still don't have a timeline for when the rest of
the adult population is eligible for a vaccine here in Japan.
CHATTERLEY: It's fascinating, isn't it? Because you and I have been talking about the prospect of perhaps a decision to cancel the Olympics and
the authorities in Japan, the International Olympic Committee have been saying look, it's going to go ahead and what you realize is, as these teams
start arriving, we are perhaps beyond the decision to cancel even now, the question comes down to exactly what you were talking about there and
whether or not there's going to be any spectators that are allowed in at all.
[09:10:13]
WANG: Julia, well, certainly the clock is ticking, the window is narrowing, but anything is possible. But as you say, the fact that these
Olympians are arriving in Japan is certainly the most tangible and strongest time we've probably seen yet that these Games are going ahead,
they are moving forward.
You had the Australian women's softball team just arriving in Japan. They are the first international athletes to arrive in this country for the
Olympics aside from the South Sudanese athletes that have been here since 2019.
Now, they are going to be confined only to their hotel and their training center. That is it for the next one and a half months, that is going to be
their life, but it is again a sign that these Games are in operational mode despite the public opposition, despite these calls for cancellation and the
fact that Japan is still battling with this fourth wave of COVID-19 cases.
But we've talked about this before, the International Olympic Committee said they are confident they're going to move forward with these Games,
even if Japan is still in a state of emergency. And the IOC, the real decision maker here, they've made it clear that they are confident they can
maintain that bubble despite the skepticism from the medical community and the financial stakes are huge. The incentives are huge for the IOC to hold
the Games this year.
There is so much money on the line, including revenue from those broadcasting rights -- Julia.
CHATTERLEY: Yes, not to mention others. Selina Wang, great to have you with us. Thank you.
Okay, let me bring you up to speed now with some of the other stories making headlines around the world.
Leading sports figures are voicing their support for tennis star, Naomi Osaka as she pulled out of the French Open. The four time major winner
caused a stir at the tournament when she refused to take part in news conferences, saying they were bad for her mental health. She said she
withdrew from the event to avoid further distractions and to focus on her wellbeing.
For more, CNN's Alex Thomas joins us live.
Alex, it's sad to lose such a huge star from the tennis tournament. But actually, as I watched the coverage of this over the weekend, it was
Martina Navratilova's tweet that caught my attention when she said, look, this is about way more than just a press conference and these athletes are
taught to take care of their physical health. But what about their emotional and their mental wellbeing, too?
Do you just have to accept that as part of the pressure? I'm not sure you do.
ALEX THOMAS, CNN WORLD SPORT: There's certainly been a massive change in tone, I think from former players. You're seeing the Martina Navratilova
tweet there, you know, say how sad she was to hear about Naomi Osaka, hope she'll be okay. And talking as you say that it's much more than just
whether or not you do a press conference.
But Martina's tone itself has also changed in the weekend and it depends on which of the two statements you're referring to when Naomi Osaka first
warned the world that she was not going to do these mandatory post match press conferences, I think she herself has admitted since then that she got
her message slightly vague because she maybe should have spoken to tennis authorities more in advance to try to thrash out some sort of compromise.
Now, there is nearly, you know, widespread sympathy for her because she has admitted she has been suffering long bouts of depression ever since that
breakthrough Grand Slam title win at the 2018 U.S. Open, which is more famous that final for Serena Williams having a massive row with one of the
line judges.
And there was also sympathy for Osaka, then she was in tears and largely forgotten. We know it is her first big major win.
So there's been a huge change in the recognition of mental health issues, particularly in the sporting world where elite athletes have to perform at
their very best all the time. So people have lots of sympathy about that, but as you say, she is a huge star.
A recent survey said that she is now the richest female athlete of any sports in the world. That's how rapid her rise has been. So it would be a
huge shame to lose her from the sport of tennis. She is taking a break from the game completely. If we're to see her back at the highest level again,
there clearly needs to be a lot of discussion between her and tennis authorities -- Julia.
CHATTERLEY: Yes, I remember that vividly with Serena Williams, as well, and she was sort of lambasted at the time for being a diva. And I think
some of the perception when Naomi came out and said this is that she wasn't going to talk to the press. It was like hang on a second. You know, that's
part of the job, and you have to do it and you're being a diva.
Alex, do you think anything changes as a result of this? In terms of just how the press conferences are carried out? Isn't that just part of the deal
of being a sports star?
THOMAS: Yes, it is part of the deal. But there could still be changes because, of course, it's subtly different in every sport. We were
discussing in the office a bit earlier how different it is in tennis or golf say compared to a team sport like soccer or football or rugby or
cricket, where you have other teammates that can shoulder the media responsibilities from time to time. You can be let down by a player or
yourself can be the star.
In an individual sport like tennis, you know you live or die on your own merits. And that means it can be huge glory and a massive high, but also
the world -- the weight of the world can be on your shoulders at times, and we heard earlier on CNN earlier in the day from Pat Cash, a former
Wimbledon champion, who has admitted to me he might have taken his own life at one stage, he was so depressed while at the peak of his powers and only
stopped himself because of his children, that's how serious it can get and was never discussed at that time.
[09:15:12]
THOMAS: And of course, there is greater awareness now. So I think that the whole dialogue over this has completely changed now Naomi has been so clear
and transparent and open about her mental health struggles.
CHATTERLEY: Yes. We wish her well and hopefully back to the game as soon as possible.
Alex Thomas, thank you for that.
Okay, Vietnam's Ho Chi Minh City is under a strict new lockdown for two weeks to combat a fourth wave of COVID-19 infections. Mandatory testing is
underway in high risk areas. Health officials say they found a suspected new coronavirus variant that appears to be a hybrid of two highly
transmissible strains.
The Office of Israel's President has rejected a petition from Prime Minister Benjamin Netanyahu, which sought to prevent a rival from forming a
new government. Right-wing politician, Naftali Bennett is working to agree on a coalition deal with opposition parties to oust Prime Minister
Netanyahu. Party leaders have until Wednesday to finalize an agreement.
Coming up on FIRST MOVE, Merck's anti-COVID pill begins Phase 3 trials. What it could mean for India's disastrous outbreak, next.
Plus, a major partnership in an emerging space, digital collectibles. We'll talk to the team launching Candy Digital about their deal with Major League
Baseball.
That's coming up. Stay with us.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE. An antiviral pill developed by Merck is now in Phase 3 trials in India. Officials there hope an oral
treatment for COVID-19 could help stem the country's outbreak.
Merck announced licensing agreements with five Indian manufacturers last month to help produce it. If the drug proves safe and effective, it would
be a major step forward in the global fight against the disease.
And joining us now is Julie Gerberding. She is Executive Vice President and Chief Patent officer at Merck. She's also a former director of the C.D.C.
Dr. Gerberding, fantastic to have you on the show.
I want to tap into your expertise both at Merck, of course and at the C.D.C., but let's just start by explaining what Merck is doing in the
battle against COVID.
DR. JULIE GERBERDING, EXECUTIVE VICE PRESIDENT AND CHIEF PATIENT OFFICER, MERCK: Thank you and like many of us, we are trying to fight this battle
on multiple fronts.
The most important focus right now is on a drug called, molnupiravir, which is an antiviral, an oral antiviral, that we hope will prove to be safe and
effective in preventing the severe consequences of disease, or perhaps even in preventing infection in people who are exposed.
[15:20:15]
GERBERDING: We're just in Phase 3 studies with us right now. So it's too early to say for sure how it will turn out. But because it could be so
helpful in places like India, we are leaning into scaling up the manufacturing and being ready if it does prove to be successful.
CHATTERLEY: And in terms of vaccine production, as well, because I know you're working with J&J in terms of ramping up production of their vaccine,
do you think that we are getting the balance right between the focus that we're putting on manufacturing of vaccines and then the manufacturing of
therapeutics, too, because to your point, this could be a crucial element in in maintaining or controlling the disease around the world.
GERBERDING: You know, this is really a three-legged stool. We absolutely need to continue to advocate for vaccine availability and access around the
world because that is a really important part of the frontline.
But inevitably, we're still going to need treatment. If for no other reason, then variants are emerging, and not everyone is going to be able to
be vaccinated or respond to vaccine. That means we also have to maintain some level of vigilance, particularly in the hotspots where the pandemic is
far from subsiding.
CHATTERLEY: How worried are you by what you're seeing in terms of the spread of the virus and the variants that we're talking about now? I mean,
the World Health Organization has decided to sort of change the terminology that we use as far as the variants are concerned because they don't want
this stigma attached to where they're first identified.
We have to get more comfortable with being honest about what we're seeing and the implications of it.
GERBERDING: I think I'd say we're on the steep slope of a learning curve about coronaviruses, and particularly this one, the fact that we saw
variants emerge before we were subjecting them to pressure from treatment or vaccines suggested this is the second nature to the coronavirus that
we're dealing with. So we shouldn't be surprised if more variants emerge over time.
Fortunately, the immune response is robust. And so far, we're holding our own with vaccines when people are able to get them and the population
coverage is high. But there's no guarantee that will continue. So staying on top of these variants is absolutely critical.
CHATTERLEY: And where does Merck stand on waiving intellectual property rights for some of these patents, I am tapping into your Chief Patent
Officer hat here, too. We spoke --
GERBERDING: Look, I have to explain that actually, I'm the Chief Patient Officer, not the Chief Patent Officer --
CHATTERLEY: Oh, patient, my apologies.
GERBERDING: I can answer your question anyway. You know, I think one of the miracles of the rapid response in vaccine and antiviral production in
this pandemic is the fact that we had a system where people were making bets on antivirals and vaccines long before the pandemic emerged, and they
do that because they understand they have the protection from patents.
So in a sense, we're benefiting from the patent system that has served us well for a long period of time. But we're also demonstrating that when we
need to, we can come together as a biopharmaceutical industry, share our resources, help each other.
For example, Merck is helping J&J manufacture its vaccine, and you're seeing that story play out across the industry. But in addition, by
voluntarily licensing products, like molnupiravir, into places where there would normally be a long leg, we're really helping accelerate access using
our kind of normal mechanisms.
I think we all understand that having a compulsory license of a vaccine is not going to be anywhere close in time to make a difference in the current
pandemic, but it could threaten our ability to continue to invest and build a better front line of protection over the long run.
CHATTERLEY: Yes, there has to be a balance there, particularly in light of what we've seen in the last 18 months.
I know one of the other things that you're incredibly focused on is what isn't happening as a result of the focus that we're placing on COVID-19, on
vaccines for COVID-19 in particular, and that's immunizations for other diseases, measles in particular. Talk me through how concerned you are
about what you're seeing there.
GERBERDING: You know, I think one of the biggest myths about COVID-19 is that children are not affected. They are of course, rarely becoming sick
with the actual SARS-coronavirus, but on a global basis, our children have become incredibly susceptible to the vaccine preventable diseases that
normally we would have robust immunization programs to protect them.
Since COVID began, 101 immunization programs in 56 countries have either delayed or suspended their national immunization programs.
[09:25:08]
GERBERDING: Measles is the canary in the coalmine for this problem. We were dealing with the measles problem even before COVID, a doubling of
deaths between 2016 and 2019, two hundred thousand children died from measles in 2019.
Now, we're seeing a suspension of measles programs. We're seeing delays in introducing other vaccines like HPV vaccine, which we know is a cancer
prevention opportunity. And if we don't catch up with this pause in effective immunization programs, our children will pay a price.
CHATTERLEY: Do you see authorities talking about this enough? I mean, this is terrifying.
GERBERDING: You know, I think it is hidden in the background of all the noise on the SARS-coronavirus tragedies that are unfolding. But we need to
have a more robust conversation. We need to get behind the financing, the advocacy, and the implementation of these programs, especially in the lower
income countries.
CHATTERLEY: Yes, and make them understand that these things are carrying on, these things are happening even when we're all focused on COVID. There
are other important diseases that people need protection against.
GERBERDING: You know, it's really part of a place we need to be as we emerge from the surge.
CHATTERLEY: Right.
GERBERDING: We need to kind of check in, get our checkups and then get back to care so that we don't succumb to vaccine preventable diseases,
undiagnosed cancers or any of the other conditions that have been in the background while we've been concentrating on the pandemic.
CHATTERLEY: Yes, get back to the doctor and check your health and keep taking all the things that we were doing before.
Dr. Julie Gerberding, fantastic to have you on the show, Chief Patient Officer at Merck, get that right.
GERBERDING: Thank you.
CHATTERLEY: I need to get more sleep. Thank you so much for that. Great to have you with us and we'll talk again soon. Thank you.
The market opens, next. Stay with us.
(COMMERCIAL BREAK)
[09:30:05]
CHATTERLEY: Welcome back to FIRST MOVE. U.S. stocks are up and running as the curtain rises on a new week and a new month on Wall Street. Clapping,
waving and smiles there at the Stock Exchange, call it a June jump. All the U.S. majors in the green with both the Dow and the S&P closing in on fresh
record highs.
The S&P coming off its fourth straight winning month in fact and up some 12 percent year-to-date. U.S. investors facing a busier data environment this
week, too, with the main event: the U.S. jobs report on Friday, and an important read on U.S. manufacturing is out within the hour today, too.
As we mentioned earlier, European factories reporting record growth last month, but price pressures are certainly building. In the meantime, the
U.S. dollar kicking off the week with losses extending a two-month slide. The dollar, however, gaining against the Chinese yuan. Chinese officials
taking new steps this week to cap the rise in its red hot currency.
In the meantime, global investors have a new way to play the world's growing appetite for alternative meat. Philippines food giant, Monde Nissin
has launched the largest food IPO in Southeast Asia history today, raising some $1 billion. The company will use the cash to expand its meat
substitute brand.
Paul La Monica joins us now. Paul, Quorn, they own Quorn, which I didn't realize. I just didn't know where that had gone. But it's also Lucky Me
noodles, as well, which our South Asian viewers and those that have traveled there I think will know very well. Talk us through this deal.
PAUL LA MONICA, CNN BUSINESS REPORTER: Yes, this is a company as you point out, the Lucky Me noodles are popular in the Philippines and Thailand. The
company hoping to expand to other markets in Asia, as well as Europe and North America.
But you nailed it, Julia, Quorn, I believe they do pronounce it without the QU sounding qu, so as corn not Quorn, is clearly the star of this company
now.
When you look at how Beyond Meat has done in the United States, Impossible Foods, a lot of excitement about a potential IPO there. Oatly recently went
public. So plant-based foods are obviously a big phenomenon globally, not just in the United States, and Quorn is a part of that for Monde Nissin.
This makes up about 22 percent of the company's total sales, and I think they are hoping to expand into other markets again around the globe to
capitalize on an appetite for plant-based alternatives to meat.
CHATTERLEY: I was looking at some of the details on this and the growth opportunities. And apparently the average customer in the Philippines eats
around 36 packs of noodles per year; in Vietnam and Indonesia, it is normally around 50 packs of noodles. So there's already growth
opportunities there.
But what about international opportunities, whether it's the United States, whether it's perhaps expanding into Europe over the coming years, and
perhaps even a dual listing just to fly the flag of the brand?
LA MONICA: Exactly. Yes. Well, you look at Quorn in the first place, that is a company that had its roots in the U.K. and I think that you will see
Monde Nissin try and expand the plant-based food business around the world, particularly in the U.S. where there is growing demand for those types of
food.
But you nailed it. The CEO mentioning to CNN Business that there is a potential interest in listing perhaps in London or even on the New York
Exchange, be at the NYSC or the NASDAQ. So one step at a time, the stock is down in its first day of trading, ever so slightly, so not the most
scintillating of debuts for this company. But right now, it is still the biggest Philippine listing, so there is obviously something to be said for
that.
CHATTERLEY: Soggy Quorn, it's like and quinoa and quinoa -- I'm sorry, but this will always be Quorn to me as opposed to corn, but clearly, I'm still
recovering from the bad weather at the weekend getting titles wrong and names wrong, too.
Thank you for correcting me
LA MONICA: Quorn, exactly.
CHATTERLEY: Quorn. Paul La Monica, thank you for that.
Okay, owning a piece of baseball history as an NFT, a non-fungible token, a trio of entrepreneurs and innovators launching a digital memorabilia
company, and they already have a major partner with them.
That's next. Stay with us.
(COMMERCIAL BREAK)
[09:37:16]
CHATTERLEY: Welcome back to FIRST MOVE. Bitcoin looking for a break after a rough month for the crypto faithful. Bitcoin trading relatively unchanged
today after falling more than 35 percent in May.
JPMorgan's crypto analysts saying recent price action suggests Bitcoin needs to fall to $26,000.00 before seeing significant support.
And a mixed day, too, for the rest of the crypto community. I can give you a quick look at what we're seeing there, too.
Now the crypto turbulence, not deterring some of the industry's biggest players from launching new products.
Michael Rubin, Executive Chairman of Fanatics, a provider of licensed sports merchandise; Mike Novogratz, founder and CEO of Galaxy Digital, is a
digital assets investment manager, and entrepreneur and investor, Gary Vaynerchuk, aka Gary Vee are teaming up. Together, they are launching Candy
Digital, a digital collectibles company. Their first partner in the NFT space -- that's non-fungible tokens, if you remember -- is no less than
Major League Baseball.
And I'm pleased to say both Mike and Gary joins us now. Guys, fantastic to have you on the show. Gary, I'm going to begin with you because last time
you were on, you help put this in English, what is Candy Digital, and what is this going to mean for, I think, around 80 million Fanatics consumers,
but also MLB fans. Talk us through it.
GARY VAYNERCHUK, CHAIRMAN, VAYNERX: You know, it's a marketplace, an IP, a brand that is looking to curate and collect intellectual property assets
and create its own and create non-fungible tokens to the marketplace that we think bring disproportionate value, whether that's on chain or off
chain.
And obviously, to do something with Michael and Mike is pretty incredible for me. And we're excited about it. I think for MLB fans, you've got three
individuals who got some gray hairs at this point in their lives who have been through the battles and have -- and also have a good sense of what's
going on in the NFT and collectible space and we are very hopeful that over the next several months and years, we put together products that the market
is interested in.
CHATTERLEY: I remember vividly when we had you on a few weeks ago and you said NBA Top Shot is a phenomenon and that's a huge, huge NFT marketplace.
It kind of combines the sort of crypto craze with the sports fanaticism, too. Is this you saying that whatever those guys can do, we can do and
maybe better.
MIKE NOVOGRATZ, CEO, DIGITAL GALAXY: I certainly hope so. Listen, I think there's -- step back, this is going to be a giant market. We're literally
at the National Anthem, not even the first inning of the NFT movement, right. NFTs are going to revolutionize how we think about collectibles, how
we think about digital art, how we think about IP in general, from music to brands.
And so I think there's going to be room for lots of players. We think we're going to build a world class company with long term vision.
[09:40:10]
NOVOGRATZ: I spent a lot of time in the crypto world, taking the institutional investor on a journey into this crypto journey. And I think
we will do the same thing here.
Fanatics has 82 million rabid sports fan customers. There, right now, probably aren't a lot of them, NFT players, right. The NFT community is
mostly from crypto natives. And so part of this journey is making NFTs accessible to this broad universe, not just the small crypto universe.
Sports is a perfect place to do it. Right? If you think about what crypto is, it's about building communities. Tribalism in lots of ways and sports
already has that, right? You've got these fanatic Jets fans, if you're Gary Vee or Knicks, or you name it, or you know, Yankees. Yankees versus Mets.
And so using digital assets as a new form of entertainment, using them to bring young fans into the community, it is fascinating and MLB is a great,
great partner to start with.
CHATTERLEY: Gary, again, when you were on last time, you said the power in NFTs is that one day, we're all going to have a wallet, we're going to have
loads of tokens in that wallet, and you're going to be able to exchange them in the future.
Every time one of these collectibles or whatever it is that's tied to MLB changes hands, you assume like the way that the economics gets reset that
they get a cut of the price that's paid. Will Candy Digital also take a cut of that? Like, just let me understand the business here.
VAYNERCHUK: Yes, so I think every deal is different. And you know, maybe allow Mike to get into those details. But I think Mike will have the same
answer as I will, which is every single one of our deals are going to be different deals, no different than, let's say, a TV network that goes out
and got TV rights from different leagues or different IP.
But the reality is, blockchain allows that royalty exchange. And it's very much part of our strategy when applicable.
And so the other thing for the viewers who are watching right now, a lot of you will probably remember when video games were not the most important
thing in culture or the biggest entertainment. You know, I am 45, I remember when PacMan and Donkey Kong were just getting going pre Nintendo.
If you think about what FIFA did for soccer in America, the video game, FIFA, created so much more interest than the Olympic soccer team, you know,
the World Cup, excuse me, soccer teams, women's and men's built on top of that.
For me, what's incredible about NFTs and why I'm so excited that Candy has this deal with Major League Baseball, when you look at the incredible young
stars like Fernando Tatis and Juan Soto taking the momentum of what's going on with the sport to begin with, and now creating a new genre that may get
people that are more fringe or maybe not even deep into baseball into it because this genre called NFT is just like the genre called video games,
change the landscape.
I think that's what we're talking about here in the macro.
CHATTERLEY: Mike, is that what you see?
NOVOGRATZ: Yes, listen, again, I think, you know, like I said, we're just starting this journey. No one understands the TAM or about the Total
Addressable Market of this space is. Right?
You're going to have VR glasses soon. You're going to be able to see your NFTs through your VR glasses. You're going to have whole metaverses that
people live in that they watch games and then all of a sudden, you'll be able to buy your merchandise, you know, your digital merchandise in this
digital world.
And so, in five years, we're going to look back and we're going to be like, wow, it's a very different environment that we live in. And so like I said,
we're building this for the long term. You can rest assured that for every partnership we have, the economics are what you think about first is
alignment. So we make money, they make money.
But I think it's going to be a fascinating journey. And we're not -- you know, we're not even started in lots of ways.
CHATTERLEY: If I think of a brand that has enormous power, collectible potential, the same kind of craze and interest, I'm not sure whether it
connects to the crypto world so much, it would be Disney, I guess.
VAYNERCHUK: Yes.
CHATTERLEY: You're the marketing guru. You've got 30 seconds. Pitch Disney. What would you be saying to Disney at this moment to get them to
join you at Candy Digital?
VAYNERCHUK: I don't need 30 seconds. They know whether you're having -- they've had hundred hours of meetings on this. You know, with this
announcement, Mike, Michael and I say we're open for business, we want to talk to every meaningful intellectual property, but Disney has spent
thousands of hours in the last 60 days, I promise you, around this conversation.
CHATTERLEY: Gary, Mike, what do you think?
NOVOGRATZ: Listen, I think Gary is dead right. You cannot be in the entertainment space, the sports space, the IP space, the brand space
without really diving in and trying to understand how this is going to change the landscape, and so every major company is thinking about it.
My advice to people has been, go slow, right? You don't need to rush in and we're trying to build partnerships for the long run.
We don't even have that many ways yet that people are displaying NFTs. If it's in the virtual world or in the physical world.
[09:45:12]
CHATTERLEY: That's right.
NOVOGRATZ: All of that is going to change in the next few years, right, with home displays, with displays in the metaverse, right, on your phone,
in your computers, on your Oculus headset. And so this is a frontier industry. Everyone is going to be part of it. It's going to change the way
we think about advertising, about collectibles, about sports. It can be fun.
VAYNERCHUK: Big changes always seem silly to everybody who is watching now, until it's not. Social media was silly. The internet was silly. Things
are fads until they are world changers.
CHATTERLEY: Until they explode. Speaking of going slow, Mike, kind of the opposite of what we've seen in the crypto space. And I can't have you on
the show without asking you, what you make of what we're seeing in terms of the price action at this moment in cryptocurrencies.
And a lot of the feedback I get is that there are big whales out there now and the smaller guys, the retail players collectively are really important,
but they feel like they're being overwhelmed. What's the response to that?
NOVOGRATZ: Yes, I don't think that's true at all. Listen, crypto started as a ground up movement and it is still basically a retail game. I have
been working for, you know, eight years or more trying to bring institutions into the space and they are moving into the space at an
accelerating pace. But the price action is still dominated by retail.
It's one of the few places on earth that you can get 50, 75, 100 to one leverage. All the big overseas exchanges provide immense amounts of
leverage.
I tell our customers and my friends, it's a hundred VOL asset, you don't need leverage. But you know, part of this generation, the new generation
wants to get rich quick. And so people are taking monster leverage.
What you saw happen was people got too excited about the space. There was so much good news coming out. A lot got priced in. Retail got very, very
levered. You can see that in so many different ways.
And then a few things happened, right? The Chinese made some comments where they kind of, you know, kicked the space in the knees. I think short term
painful; long term, actually very constructive. Yes, Elon Musk tweeting about ESG.
You had a few things all happening at the same time, and it created this deleveraging, right, people were too long at the wrong level. They all got
wiped out. And now we're going to consolidate here, you know, Bitcoin between, I don't know, $35,000.00 and $45,000.00 for a while, until the
story gets picked back up, until people brush off the dust and you'll see this market head much higher towards the end of the year.
CHATTERLEY: How long to go? How long might it go, just in case people are watching and we get to that point, and they're fearful? Is there any level
this could get to where you would worry?
NOVOGRATZ: Every once in a while, my son says, are you Nostradamus? I say no, I kind of wish I was
CHATTERLEY: I know.
NOVOGRATZ: These people, they usually take a few, you know, weeks to months to consolidate before we head back higher. I could be wrong, but for
us to do this, look at the quality of the people that we're hiring at Galaxy, right? We started the year 75 to 80 people or started last year,
we're going to be 400 by the end of the year.
And the level of excellence in our summer intern class and our new analysts and in the people we're bringing in is a quantum higher than it was three
years ago. And so when I think about great businesses, they are all -- it is human capital and the many human capital pouring into the blockchain
crypto space is a mess.
CHATTERLEY: I saw that Candy Digital was hiring as well. Gary, you were trying to say something there.
NOVOGRATZ: Part of that thesis is -- but it is part of the blockchain space. It's this revolutionary decentralization.
CHATTERLEY: Yes.
VAYNERCHUK: Yes, I think the one thing -- the one thing I wanted to add was Mike is right, if you look at the historical way that Bitcoin and
Ethereum have played out, I would add -- I would add one more variable, which is the reality now though, is there are so many more people playing
in this space and what can happen in that scenario is one big thing can happen tomorrow and it could change the dynamic of the marketplace.
To your earlier point, Disney could come and announce X, Y, and Z, and all of a sudden, Ethereum takes a substantial push. You have enough real things
happening now, not the alpha, we're in the beta stage, big brands, big businesses, big governments coming in that could do something that could
trigger it in a much quicker cycle. And I think that, especially for Ethereum where people are building on top of is something to pay attention
to.
CHATTERLEY: Yes. And Mike could come out and say, you know what, I've had enough of crypto and I'm done and the market would collapse, too. The
message here just that it's early days. We're going to get these price swings until you get more accessibility, until you have more crypto
products like NFTs and people get more comfortable with this space, Mike?
[09:50:07]
CHATTERLEY: Yes.
VAYNERCHUK: Of course. You know, they will just jump in if -- I'm not sure if Mike is hearing, of course, that's what always happens. That's what
happened with internet stocks. That's what just -- I mean, I'm fascinated that we're in 2021 just have lived through 1994 to 2021, and people don't
see the pattern recognitions of consumer innovation. That's exactly what's going to happen.
CHATTERLEY: Mike, final word? Do I still have you?
NOVOGRATZ: Yes, here again, I kind of -- I lost the audio for a little while. So I'm sure Gary kept us entertained. Listen, my final word is like
this whole space is moving at an unbelievable pace of innovation, of excitement, and of new people coming into it.
And so there are going to be ups and downs in price, but I'm wildly confident that the NFT space is going to be far bigger than people think
and the crypto space is going to be far bigger than people think.
CHATTERLEY: Wildly confident, even if it's a wild ride. You'll enjoy it.
Cheers, guys. Great to have you on.
VAYNERCHUK: Thank you.
CHATTERLEY: Congrats with the launch. Mike Novogratz and Gary Vaynerchuk there. Thank you.
NOVOGRATZ: Thanks again.
CHATTERLEY: You're watching FIRST MOVE. More to come.
(COMMERCIAL BREAK)
CHATTERLEY: Welcome back to FIRST MOVE with another look at what we're seeing in terms of early price action this Tuesday. U.S. stocks in near
record highs in early trade. Energy stocks among the biggest gainers as oil prices rally ahead of today's OPEC Plus meeting.
Tesla higher, too, after almost or a near 10 percent drop in May amid news of price hikes, if you can sustain it and people will pay the prices, then
it helps your bottom line. That's the message.
And AMC shares are soaring again after more than 150 percent rise in May, the popular Reddit stock announcing a $230 million capital raise to help it
get through theater reopening uncertainties.
Now, it's probably a safe bet, most university graduates don't remember their commencement ceremony. But if this happened, you probably would.
(BEGIN VIDEO CLIP)
ELFRED ANTHONY PINKARD, PRESIDENT, WILBERFORCE UNIVERSITY: Because you have shown that you are capable of doing work under difficult
circumstances, because you represent the best of your generation, we wish to give you a fresh start.
So therefore, the Wilberforce University Board of Trustees has authorized me to forgive any debt.
[CHEERING AND APPLAUSE]
CHATTERLEY: That's life changing news there given by the President of Wilberforce University. The cancelled debt data applies to all 2020 and
2021 graduates of the Historically Black University.
The total amount is more than $375,000.00. The school says the amount will be covered by scholarships from the United Negro College Fund, Jack and
Jill and other funding. Some serious happiness and jubilation there and disbelief.
[09:55:04]
CHATTERLEY: Now speaking of disbelief, stunning footage out of Iceland. A drone crashing straight into an erupting volcano. It goes towards the
crater, then straight into the bubbling hot lava.
The volcano is around 25 miles outside of Iceland's capital and has been spewing lava since March. This is the first eruption the area has seen in
hundreds of years. Wow. Couldn't take my eyes off of that, but I have to read.
Meanwhile, NASA's Perseverance rover is celebrating 100 days on Mars. A hundred days in Martian time, that is. Since landing in February, it has
captured all kinds of pictures from the Red Planet's surface. Perseverance has the funding to keep operating there for two of our Earth years looking
for signs of past life and we hope it comes back in time to send back a few more pictures along the way.
Okay. That's it for the show. If you missed any of our interviews today, they will be on my Twitter and Instagram pages. You can search for
@jchatterleyCNN.
In the meantime, stay safe. Have a great rest of the day.
And "Connect the World" with Becky Anderson is next.
(COMMERCIAL BREAK)
[10:00:00]
END
